Adani group in makeover mode to blur troubled past

MUMBAI: The Adanis, a scrappy entrepreneurial group from Gujarat that has a history of run-ins with the regulators, law-enforcement authorities and environmentalists, has hired a brand consultancy firm that has helped burnish the image of staid industrial stalwarts such as the Tatas and the Munjals.

In July last year the group, which has built a business model that has capitalised on India's energy deficit, hired Wolff Olins, a marquee international brand consultancy firm. Charles Wright, member of the leadership team of Wolff Olins, with the specific responsibility for business in India said they had been hired to help Adanis manage their reputation.

"He (Gautam Adani) felt they are at a size when they have to take control and manage their reputation actively." The move by Gautam Adani, the Group's founder, comes at a time when the relationship between big business and the government is under scrutiny due to a succession of scandals.

The Adani group, is now close to registering $7 billion in annual revenues, a far cry from its origins as a supplier of salt for American commodity giant Cargill in the 1980s. In a little over two decades it has blitzed its way to the upper echelons among the new generation of Indian conglomerates, and is now aiming to build infrastructure around the mines it has acquired in Australia and Indonesia.

As the group crosses geographies, its main promoter, the low-profile Gautam Adani can no longer afford to ignore public perception of him and the group. The brand building exercise started in July last year and is now close to culmination.

On Thursday, Gautam Adani will take the podium in Ahmedabad to address more than 1,000 employees in a rare town hall meeting. This is the first time that Adani would address such a large gathering as he is said to be more comfortable dealing with smaller groups. His speech will be relayed live to Australia and Indonesia where the company's employees will tune in to hear their founder's vision for the group.

"The company needs to manage its reputation. They need to know what it does," says Wright. The story will be about the group and not about Gautam Adani. "The more the story is about a man and his vision, more fragile will the story get," he adds. Charles Wright, who admits that a lot of branding these days is like "lipstick on a gorilla," was approached in May, last year.

His firm carried out over 60 interviews starting from Gautam Adani to new recruits in the firm and later commissioned a research outfit to reach out to policymakers and customers before getting down to crafting a vision of what the Adani group should represent.

"We are careful before we undertake these assignments as we have to be sure that the management is serious as opposed to wanting lipstick. Otherwise, the benefits are long gone and the risk of a backlash is quite strong," Wright says. From a trader to owning assets, the group has now entered the third phase of growth which is oriented to delivering benefits through integration of all its global assets. Sources say there are other firms working on different aspects of the group. Adani is working with different consulting firms including PWC which is working on enhancing "corporate values," of the group.

Ask Wright about his client, he says, "Gautam Adani may not be the most eloquent of our clients. But he is a rare visionary." According to Wright, Adani is perhaps the only Indian industrialist from the first generation to have successfully connected all the dots in the Indian power infrastructure sector.

Rapid Growth

Analysts estimate suggest that by 2020 the private sector will account for 40% of electricity generation, with Adani being the largest player; with eight plants and 20,000 mw capacity. Its current capacity is pegged at 3,960 mw at the start of this year, but slated to soar to 10,000 mw by the end of 2012. He has built a world-class deep-water port in Mundra, acquired coal mines in Indonesia and Australia and ships to ferry the coal. Huge power plants have been built close to the port.

In Australia, two significantly large acquisitions are the Galilee Basin coal mine, with reserves of 10.4 billion tonnes, and Abbot Point port, with a capacity of 50 million tonnes. $12-15 billion has been earmarked for investment by the group over the next seven years, and half this sum will be used to expand international operations.

According to an analyst, the group has so far, by virtue of its background in trading, been able to mitigate risks associated with the business. "More than 75% of our electricity is pre-sold in long-term arrangements, leaving Adani free to trade the balance wherever the best profits are to be found," the analyst revealed.